Ambitious Profit Minded Global Companies Should Still Behave in a Socially Responsible Way (Essay Sample)

AMBITIOUS, PROFIT-MINDED GLOBAL COMPANIES SHOULD STILL BEHAVE IN A SOCIALLY-RESPONSIBLE WAY. DISCUSS.
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Introduction
Highly ambitious and Profit-minded universal companies make significant contributions towards society. They create employment opportunities and finance the common welfare of the population. The main task of such corporations is to create value and produce financial results firmly within the legislative background of the society where they operate. However, corporations are not just operational in a market. They are similarly functioning within a culture of the host local communities and a political scheme. The arguments surrounding social responsibility of corporations is concerned with functional role corporations play in this wider social context (Krasner 2015).
Corporations that have good social responsibility policy are beneficial not merely for a corporation’s well-being but also for its workforces, shareholders, customers, and the environment and community or society as a whole. Corporations have an influence on social development where they function. They thus have a responsibility that spreads beyond value creation. It is, thus, important to evaluate and recognize the extent to which corporations are socially responsible. Keeping this in view, this essay seeks to put into discussion the arguments behind the approaches of social responsibility among globally operating profit-minded companies.
The unending Debate on social responsibility among profit-minded corporations:
Major corporations are in the business of helping the society these days. The current generation has ushered in an attractive chapter of social responsibility awareness. The society and the private sector have come to assume that the profit-minded corporations will frequently recognize and address the impending consequences that their activities have on their immediate environments. Starting at the end of 1990’s, consumers have demonstrated an incredible amount of social awareness and involvement (Reinhardt et al. 2008. They are quick to punish corporations that exercise unethical business actions and quick to reward corporations that are innovative in their obligation to refining the world (Bowie 2012.)
This new wave of social responsibility activities can be traced backed three decades ago, with the series of continuing demonstrations and strikes by Nike factory employees and human rights activists. During that time, Nike encountered a torrent of revolutions and strikes by their employees in Indonesia, Vietnam and Korea regarding low remunerations and hazardous working conditions. The torrent of adverse publicity increased in 1992 when Jeff Ballinger exposed the company with the published "Nike, The FreeTrade Heel: Nike’s Profits Jump on the Backs of Asian Workers." The publication revealed Nike’s factory states in Indonesia that showed wages as low as fourteen cents per working hour. Another negative fact was that Nike did not employ the workers, but contracted subcontractor to assist Nike escape legal responsibilities for remunerations and working conditions (Reinhardt et al. 2008).Ballinger’s report hit the corporation at a critical moment; from the late 1980s to early 1990s. Nike’s earnings had tripled, nonetheless following the countless sweatshop-like outrages, Nike’s share prices dropped dramatically and sales lagged (Urip 2013).The scandal intensified by labour campaigners, educational institutions and individual consumers resulted in crippling reputational harm. By 1998 CEO, Phil Knight admitted that "The Nike product has become identical with slave wages, involuntary overtime, and haphazard abuse. He stated that the American consumer does not want to purchase products manufactured under abusive settings”. In response, the Corporation developed several decisive reforms to redeem its image. Nike conscripted a "Code of Conduct" to be firmly adhered to in all of its factory operations and extended its social responsibility approaches.
Today, Nike’s social responsibility has touted the corporation as a role model and has helped pave the way for other ambitious, globally and profit-minded corporations to engage in more socially conscious business practices. However, Nike acquired a very "reactionary" stance on the concerns to social responsibility and executive leaders were only called to action when the social pressure reached an escalating point. They formally possessed a very self-protective and slightly compliant attitude, quoting that Nike was being " unfairly analysed and punished for participating in practices that almost every other large manufactures were also practicing" (Harvard Business Review 2004).
Actual reform transpired once Nike executive leaders recognized that they indeed needed to do more than introduce provisional compliance strategies to mitigate the erosion of economic value from the public scandals. They instead arrived at a lasting solution that would rapidly overcome any imminent disadvantages. The result was a social responsibility approaches that advanced from focusing on risk management, patronage, and compliance to one that exploited Nike’s natural attention on innovation to evolve into a more sustainable corporate, by which the people, the society, and profits were brought into equilibrium for more lifelong success (D’Amato et al. 2009).
Milton Friedman’s theory
The utmost natural, or widespread, hypothesis that is made with regards to a Corporation’s pursuit of social responsibility approaches is that, in some ways or another, there exists a profit-seeking element to the venture (Reinhardt et al. 2008).. Corporate philanthropy must some way be profitable, either in the long-term or the short-term, for Corporations to apportion resources towards integrating social impact plans into their traditional business models. Corporations have, and continuously will be, mainly enthused by a larger consumer base, faster production, and inexpensive input costs, all in the struggle to upsurge the bottom line and whether or not social responsibility comprises a Corporation’s real belief or pledge in helping society or not, many contend that these sorts of programs epitomize another mechanism to enable increased cash flow (Rangan & Chase 2012).
Society has a deep-rooted perception that some corporations are covetous and are, above all else, mainly interested in generating personal wealth. The understanding of the role of Corporations in society has been dominant to discussions concerning social responsibility, as a Corporations’ "reason for existence" is frequently brought up in debating the rationality or usefulness of Social Responsibility. Theories exist for the power or the purpose of a Corporate informs notions made about social responsibility. Therefore, it is first essential to understand from where these theories about the role of Corporations originate. What has led to a pervasive, deep-rooted indulgent of for-profit Corporations as only self-centred entities and how does this translate to our current understanding of the social responsibility debate (Reinhardt et al. 2008).
The most argument to Nobel Prize Winning and Economist Friedman’s 1970 New York Times Article Titled, "The Social Responsibility of Business is to Increase Its Profits" as having a substantial impact on Social Responsibility discussions. Friedman’s argument is remarkable and very vibrant: that Corporations’ should only be concerned with profits making. He contests the idea that corporations should be concerned in supporting social needs, such as providing employment, lessening pollution, and disregarding discrimination, and affirms that a corporation’s sole "social responsibility" is to be profit-seeking. He labels plainly, "there is only one social responsibility of corporation to make use of its resources and participate in events intended to maximise its profits as long as it stays within the rules and regulations of the game, which is to positions that they should engage in open and free competition without dishonesty or fraud" (Friedman, 1970).
Economics Nobel Friedman (1970) and others strongly dispute that social responsibility is incompatible with capitalism and the nature and objectives of the business. The ultimate aim of a business is to maximise profits for its shareholders by observing the laws and regulations of the countries within which they operate. Those who embrace this interpretation favour neo-liberalism. They contend that advances in body capital, longevity and mortality have been created by economic growth attributed to free enterprise.
It has been claimed by Borelli (2015) that social responsibility approaches acts as an insurance policy for image-sensitive Chief Executive Officers (CEOs). By remunerating a conceptual and financial cover charge to social and eco-friendly causes, CEOs gain access to Club Corporate Social Responsibility (CSR) and relish some membership privileges. Among major club privilege is protection from advocacy activities for instance protests and boycotts exerted by anti-business protesters. By nurturing into politically upright themes, these movements frequently distract the attention of shareholders and media from failed business.
Freidman introduces the awareness that a profit-minded corporation is nothing but a legal entity and thus is deficient on a "social conscience" which would direct it to incorporate social initiatives into its primary business model. In the course of anthropomorphizing businesses, the general society overlooks that it makes no sense to assertion that a Corporation has any "social responsibilities," much less moral ones, and th...